When organisations consider their recruitment, retention and employment strategies, they tend to view permanent and contract hiring as two outlets that are at odds with one another. In reality, an effective strategy, would see them as complimentary outlets that foster stability and flexibility with, and across, a workforce.

When combined, these two approaches allow businesses to adapt quickly to changing demands, ensuring they have the right people at the right time. Here’s why merging permanent and contract recruitment is the smart move for your business.

The Changing Value of Permanent Recruitment

For years, permanent recruitment was the cornerstone of a stable, long-term workforce. Permanent employees were essential for maintaining company culture, aligning with business objectives, and ensuring continuity. Employers invested in training, development, and internal career opportunities to help both the employee and the company grow together.

However, with younger generations entering the workforce, the traditional assumption of loyalty to a single employer is no longer a given. These days, salary, career progression, and the desire for variety often outweigh job security. While permanent employees still bring value, the bond isn't as strong as it once was. People are increasingly looking for roles offering competitive salaries, flexible working, and the chance to work on different projects.

The Role of Contract Recruitment

Despite the complexities introduced by IR35, contract recruitment remains crucial. Contractors provide flexibility to meet short-term demands and bring in specific expertise for projects with a defined timeframe or areas requiring niche skills. While the financial side of contracting has evolved, it still offers businesses the ability to scale their workforce up or down, matching resources to fluctuating needs without the long-term commitments of permanent hires.

Contractors bring rapid access to skilled talent, especially in industries like engineering and tech, where expertise in evolving technological trends are in high demand. They allow companies to onboard professionals quickly, bypassing lengthy hiring processes. Additionally, businesses save on overhead costs like benefits, pensions, and extensive training programmes, only paying for the expertise they need when they need it.

Leveraging Both for a More Agile Workforce

The true strength of recruitment comes from blending permanent and contract hiring. Permanent employees provide long-term stability, keeping the company’s culture intact and helping to drive the core mission forward. Contractors, on the other hand, offer flexibility for specific projects or periods of rapid growth.

Permanent staff are ideal for roles requiring in-depth knowledge and alignment with company goals, ensuring continuity. Contract staff offer the agility to pivot quickly, bringing in specialized skills or filling short-term needs without compromising on the quality of work. This balance allows companies to stay adaptable to changes in demand while maintaining their core operations.

Adapting to Changing Employee Expectations and the Impact of IR35

As employee expectations evolve, businesses must reassess their recruitment strategies. With salary, career growth, and job variety now top priorities, companies need to provide opportunities for development, foster a culture of long-term growth, and offer work-life balance to attract and retain talent.

For permanent staff, the focus should be on retention—through career development, attractive benefits, and a company culture that aligns with their ambitions. Contractors remain essential for filling short-term gaps and providing expertise on-demand. A balanced approach allows businesses to meet the diverse needs of their workforce, keeping them competitive and agile.

Managing Resources and Costs Effectively

Using both permanent and contract recruitment provides a strategic approach to managing resources and costs. Permanent employees may come with higher overhead costs—such as salaries, benefits, and pensions—but they provide the stability essential for ongoing operations. Contractors, by contrast, offer flexibility and can be engaged as needed, helping to manage costs effectively by reducing long-term commitments.

A blended approach, assessing the benefits an organisation can extract from both elements of it's workforce, will allow for efficiencies and ROI in learning, development, upskilling, onboarding, offboarding, retention and provide the added benefit of strengthening culture and promoting EVP across the entire workforce.

This hybrid model protects businesses from overcommitting to permanent hires that may not align with evolving workforce trends. By balancing permanent and contract hires according to business needs, companies can remain adaptable while achieving long-term objectives.

Conclusion

Permanent and contract recruitment aren’t separate strategies; they complement each other. When used together, they create a workforce that’s both stable and flexible, responsive to immediate demands and long-term goals. With changing employee expectations and the impact of IR35, businesses must rethink how they manage talent. By integrating both approaches, companies can enjoy the continuity and commitment of permanent staff while remaining agile through contract recruitment. It’s a balanced approach that keeps your business competitive and prepared for the future.